Mmg Ltd. · HKEX:1208

Mmg — Standard Chartered Earth's Resources Forum 2013

23 slides from Mmg's conference presentation, Jun 19, 2013

  1. Slide 1: Earth's Resources Forum

    Standard Chartered EARTH’S RESOURCES FORUM David Lamont Chief Financial Officer 19 June 2013 Hong Kong HKEx: 1208

  2. Slide 2: Important Information

    Important Information The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part,

  3. Slide 3: MMG - uniquely positioned

    MMG - uniquely positioned MMG Limited  Listed on the Stock Exchange of Hong Kong – stock code 1208.  Headquartered in Melbourne, Australia.  Operations in Laos, the Democratic Republic of Congo and Australia.  Experienced international management team.  Support from majority shareholder - China

  4. Slide 4: Overview of assets

    Overview of assets Izok Corridor copper / lead / silver / zinc Sepon gold / copper Century Mutoshi Kinsevere lead / silver / zinc copper copper Dugald River Golden Grove lead / silver / zinc copper / gold / lead / silver / zinc Legend: Rosebery Operating assets copper / gold / lead / silver / zinc D

  5. Slide 5: 2012 performance

    2012 performance Highlights EBITDA1  Safety remains a core value – TRIFR1 3.0, a 27% improvement US$ million 2012 2011 % from 2011. Sepon 491.4 529.4 (7)  2012 revenue of US$2.5 bln, 49% from Cu and 35% from Zn. Kinsevere 131.1 - N/A  Annual production records achieved at three of MMG’s five oper

  6. Slide 6: Prioritising Productivity Improvements

    Prioritising Productivity Improvements 2012 Actual 2013 Guidance 2012 Actual 2013 Guidance Sepon Rosebery Copper – Production 86,295 tonnes 83,000 – 88,000 tonnes Zinc – production 70,410 tonnes 75,000 – 80,000 tonnes Copper – C1 costs US$0.98/lb US$0.95 – US$1.05 / lb Zinc – C1 costs US$0.38/lb US$

  7. Slide 7: Reserves – Mine Life Extensions

    Reserves – Mine Life Extensions Ore Reserve million tonnes 130 120 110 100 90 Reserves Sepon Sepon Kinsevere Kinsevere Century Century Rosebery Rosebery Golden Golden Dugald Reserves 30 June -ve +ve -ve +ve -ve +ve -ve +ve Grove Grove River 30 June 2011 -ve +ve +ve 2012 (1) Details of Ore Reserves a

  8. Slide 8: Market outlook

    Market outlook Zinc outlook Refined zinc surplus / (deficit)1 LME zinc price ‘000 tonnes US$ / tonne  Demand growth driven by shift to greater galvanising. 1,250 4,000 Forecast price  Global zinc supply expected to contract through closures and reduced output 1,000 3,000 this decade – including Ce

  9. Slide 9: Our future aspirations

    Our future aspirations Growth MMG copper equivalent production growth 1  Consistent and sustainable earnings growth. ‘000 tonnes  Strong financial outcomes. 400  Acquisition of base metals assets. CAGR 5%  Realisation of value of the project pipeline. CAGR 7% 300 Transformation  Innovative grow

  10. Slide 10: Operations review

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  11. Slide 11: Sepon

    Sepon Highlights Financials  Strong, consistent operating performance. US$ million 2012 2011 %  86,295 tonnes copper cathode, 8% above original design Revenue 806.2 816.9 (1) nameplate capacity.  Well managed costs – flat C1 costs per pound of copper EBITDA 1 491.4 529.4 (7) cathode produced comp

  12. Slide 12: Kinsevere

    Kinsevere Highlights Financials2  Successful integration following February 2012 acquisition of US$ million 2012 2011 % Anvil Mining. Revenue 279.9 - N/A  Important and valuable contribution to Company performance in 2012. EBITDA 1 131.1 - N/A  Achieved nameplate capacity on an annualised basis i

  13. Slide 13: Century

    Century Highlights Financials  Annual MMG production record achieved despite major US$ million 2012 2011 % planned maintenance. Revenue 752.9 750.4 0  C1 costs below guidance and lower than 2011  Significant improvements in asset utilisation and throughput EBITDA 1 283.6 293.0 (3) rates. EBIT 48.

  14. Slide 14: Rosebery

    Rosebery Highlights Financials  Solid operating performance with 10% increase in ore mined. US$ million 2012 2011 %  Seismic event impacted production and costs in 2012. Revenue 267.5 272.5 (2)  Higher contractor and consumable costs in 2012. EBITDA 1 85.7 108.6 (21)  Upgrades to ground support

  15. Slide 15: Golden Grove

    Golden Grove Highlights Financials  Strategic review completed focussed on improving the US$ million 2012 2011 % sustainable long-term profitability. Revenue 392.9 388.5 1  Restructure and related activities resulted in unfavourable impact to operating expenses of US$19.9m. EBITDA 1 67.9 101.6 (33

  16. Slide 16: C1 cost performance

    C1 cost performance Century C1 costs Kinsevere C1 costs USc / lb zinc USc / lb copper 200 65 175 60 55 150 50 125 2013 guidance: 140 – 170 USc / lb copper 2013 guidance: 58 – 62 USc / lb zinc 45 100 2010 2011 2012 2013F 2010 2011 2012 2013F Sepon C1 costs Sepon C1 costs USc / oz gold USc / lb copper

  17. Slide 17: C1 cost performance (continued)

    C1 cost performance (continued) Golden Grove C1 costs Golden Grove C1 costs USc / lb copper USc / lb zinc 330 50 40 2013 guidance: 45 – 55 USc / lb zinc 300 30 20 270 2013 guidance: 280 – 310 USc / lb copper 10 240 0 2010 2011 2012 2013F 2010 2011 2012 2013F Rosebery C1 costs Golden Grove zinc C1 co

  18. Slide 18: Development progress of our major growth projects

    Development progress of our major growth projects Dugald River  Board endorsement1 of the A$1,488m Dugald River project supporting MMG’s long-term zinc strategy.  Two exploration declines now in excess of 4.5km.  Expected annual production2 of 200,000 – 220,000 tonnes of zinc, 27,000 – 30,000 ton

  19. Slide 19: Planned 2013 Exploration Activity

    Planned 2013 Exploration Activity Mine district New discovery Project generation ~ 60% exploration expenditure ~ 30% exploration expenditure ~ 10% exploration expenditure  Sepon – further drilling of both  Curnamona Joint Venture  Multi-commodity (copper, zinc oxide and primary gold, (copper, Sou

  20. Slide 20: International Board and leadership team

    International Board and leadership team Chairman Wang Lixin 王立新 CFO & Executive EGM – Strategic Planning Non-executive Director CEO & Executive Director & Executive Director Jiao Jian Director David Lamont Xu Jiqing 焦健 Andrew Michelmore 徐基清 Non-executive Director Independent Independent Independent

  21. Slide 21: Underlying income statement (continuing operations)

    Underlying income statement (continuing operations) Year ended 31 December Variance 2012 2011 US$ million % Revenue 2,499.4 2,228.3 12 Underlying EBITDA 853.2 847.9 1 Underlying EBIT 405.6 539.4 (25) Net finance costs (87.7) (46.2) 90 Underlying profit before income tax 317.9 493.2 (36) Income tax e

  22. Slide 22: Consolidated statement of financial position

    Consolidated statement of financial position Year ended 31 December 2012 2011 US$ million Non-current assets 3,749.7 1,856.2 Current assets – cash and cash equivalents 102.1 1,096.5 Current assets – other 807.4 500.8 Total assets 4,659.2 3,453.5 Total equity 1,685.8 1,494.4 Non-current liabilities 2

  23. Slide 23: Consolidated financial performance: Cash flow statement

    Consolidated financial performance: Cash flow statement Year ended 31 December 2012 2011 US$ million Cash flows from continuing operations 655.3 699.7 Cash flows from discontinued operations - 100.8 Net cash generated from operating activities 655.3 800.5 Purchase of property, plant and equipment (7

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